2020 has been a challenging year for many businesses and individuals. The COVID-19 pandemic has impacted our health and livelihoods.
This impact looks set to continue with the World Bank predicting a 5.2% reduction in global output in 2020 and the Bank of England predicting that the UK will experience a sharp recession.
Many would assume that this is the worst time to start a business. But, if we consider some of the world’s most successful companies like Uber, Airbnb, Disney, FedEx, IBM and Microsoft, beyond their success today they all have one thing in common; they started during a recession.
So why is now a great time to start a business?
Be master of your destiny
COVID-19 has shown many of us just how fragile our ‘job security’ really is. The companies that we relied on for our monthly salary have faced hard times and let many people go and placed many others on furlough. This lack of control can be scary and has created many entrepreneurs who have refused to let someone else be the master of their destiny.
Starting a business, of course, contains many risks and uncertainties, but entrepreneurs enjoy the freedom that comes with setting their course. You can lead the efforts that ultimately sees the company succeed or fail, rather than leaving that decision in the hands of someone else.
Use the extra thinking time
One plus point of all the disruption around COVID-19 has been some additional thinking time. Where our days once involved a long commute and a packed schedule, many of us have been at home with empty social calendars.
This thinking time is critical for deciding what we want in life and assessing how far our current lifestyle choices are meeting that. It’s the perfect moment to define that business idea that we’ve always had at the back of our minds and see if it’s something that we want to pursue.
Uncertainty creates opportunities
COVID-19 has created some significant problems that people are motivated to address. Consumers need businesses to step in and innovate products and services that help them at this challenging time.
Entrepreneurs who have assisted with personal protective equipment, deliveries, online tutoring, home improvement products and services for online businesses have quickly seen success because they’ve satisfied a considerable demand.
There’s now a market in helping people to do the things that we have always done or to receive the items they usually receive, safely. It’s sometimes more straightforward for a nimble start-up to meet these needs than for a larger and more established business to change how it works.
Marketing costs are lower
Many companies have slashed their advertising budgets in attempts to control costs during the downturn. This behavior has reduced the costs of advertising on platforms such as Facebook and Google. These reduced costs, coupled with the fact that more people are surfing online for more extended periods, present an opportunity for start-ups who want to become known quickly.
Minimize risk with a side hustle
A common misconception with starting a new business is that you have to go ‘all-in’ immediately. Going all-in can be a risky strategy unless you have significant savings to live on while your business gets started.
Why not consider starting a business as a side hustle alongside another income stream? Companies such as Slack, Airbnb and Innocent Drinks all started this way and have grown to become well-known brands.
If you’re just starting, especially with an online business, you don’t need a lot to launch. A simple website with a secure payment solution such as an eCommerce Payment Gateway will enable your customers to buy from you.
Talent is accessible and affordable
With so many people out of work and so many freelancers seeing reduced work from their clients, now is the perfect time to get support from top talent without breaking the bank. If you need help with setting up a website, online advertising, or even think that your business is ready for a full-time employee, you’ll find lots of great talent that is immediately available via platforms such as Indeed, UpWork and PeoplePerHour.
Be creative, not costly
If you are starting with very little cash in reserve, be very careful with how you invest your money. Try to test the market without spending huge sums on product production or building a very complicated website. You can invest in these things over time as you become confident that the demand is there.
As your business grows, you can reinvest a proportion of the sales back into the business and consider a flexible credit facility such as a cash advance, to help you seize opportunities to grow.
Conclusion: scratch that itch to start a business!
While it may seem counterintuitive to start a business as companies around us are failing, as so many of today’s most successful businesses have shown, a downturn creates vast opportunities for the brave entrepreneur.
Use any extra time you have on your hands to decide if you would like to be the master of your destiny. If so, think of ways that you can solve problems that people are facing today. You don’t need to invest a lot of money upfront and to minimize your financial risks your business can start as a side hustle. If you need cost-effective short-term help, look at what specialist talent is available on freelancing platforms.
If you’ve always had a business dream and that dream makes sense in today’s market, don’t let anything get in your way.
You can read more tips in our blog about taking your business online.
This content is brought to you by Emma Matthews.